Baycorp Advantage Unit Under Scrutiny of Australian Gov't

Baycorp Advantage Limited advises that its wholly owned subsidiary, Alliance Factoring Pty Ltd (Alliance), has received a notice from the Australian Competition and Consumer Commission (ACCC) issued under paragraph 155 (1) (a) and (b) of the Trade Practices Act 1974. The notice requires Alliance to furnish certain information and documents to the ACCC in respect of an inquiry into some of the debt recovery procedures followed by Alliance in the course of its debt recovery business since June 2002.

BCA and Alliance are treating the inquiry seriously and are committed to co-operating fully with the ACCC. The inquiry is at an early stage and it is not yet possible to quantify the financial effect, if any, on Alliance.

Alliance is part of the Baycorp Advantage Collection Services (BCS) division. It purchases debt ledgers in Australia at less than face value and seeks to recover the debt as principal, for its own account. For the most recent reporting period ended 31 December 2004 Alliance generated approximately 18% of BCS revenues. This equates to approximately 5% of BCA Group revenues.

BCA Managing Director, Andrew Want, said ?We are committed to operating at best practice standards that will ensure consumer confidence in our business and in the debt collection industry. Should the inquiry reveal areas for improvement in Alliance?s internal procedures and systems, these will be implemented.?